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German R&D Moving Abroad

DW staff (jen)August 31, 2005

A new study shows the German trend toward shifting jobs overseas is growing in the R&D sector -- but business advocates try to look at the bright side.

Many firms have shifted production to Poland -- is R&D next?Image: Transit-Archiv

The poll by the German Chambers of Industry and Commerce (DIHK) surveyed 4,400 internationally active companies, including small and medium-sized businesses. Nearly 30 percent of the companies had already moved part of their operations overseas or had plans to do so, the study showed.

For the most part, the companies that planned to shift research and development capacity abroad were those that had moved production there earlier. Businesses cited lower wages abroad, proximity to clients and demands of the marketplace as their reasons for the increased overseas presence.

Siemens Handy Fabrik in Brasilien
Siemens makes cell phones in BrazilImage: Siemens

Only 3 percent of those who had moved production or research facilities abroad would like to bring them back to Germany, the study showed.

While the increase in jobs abroad did help keep the German economy afloat, the situation could be much better for Germany, said DIHK head Ludwig-Georg Braun.

Staying positive

"The dynamics of foreign economies could have a more positive effect on German jobs if many companies would not opt to move their production and research and development overseas," Braun said.

In an effort to see the positive side of the results, Braun noted that the study clearly showed international activity helped keep sales and personnel levels afloat at home.

Bildgalerie EU-Osterweiterung II: Polen
Polish launderers clean linens for Berlin hotelsImage: dpa

According to the report, 55 percent of the companies polled had improved sales as a result of their move. Some 37 percent of respondents said that since moving some activities overseas, they had been able to expand within Germany. Another 22 percent said they had laid off personnel.

The more companies moved production abroad, however, the more they would consider moving research and development jobs as well, Braun warned. Companies most frequently moved production to new EU member states and to Asia.

Hopes for future

Braun said he hoped a new government would help boost the country in terms of innovation, development and research. And he hoped that foreign investors would begin to see Germany as an attractive location for their businesses.